FairPoint welcomes Maine regulation that claims to create competitive playing field

FairPoint Communications (Nasdaq: FRP) may have lost a lot of subscribers in the wake of the ongoing troubles it faced after purchasing Verizon's (NYSE: VZ) former New England lines, but new telecom regulations could enable it to compete more effectively for customers in its Maine territory.

Gov. Paul LePage has signed new legislation directed the Maine Public Utilities Commission to provide the Joint Standing Committee on Energy, Utilities and Technology with a plan to reform Maine's telecom regulatory structure.

Mike Reed, FairPoint's Maine president, said that while he does not "want to be deregulated yet," the service provider would like to "get less regulated to match the increase in competition."

Because FairPoint is an incumbent carrier, it has to provide service in any section of the state even if it's not profitable, while CLECs and cable operators can provide service where they can get a payback on their investment.

Reed said that since cable started offering voice and data services 10 years ago in Maine, they have become "a very, very big competitor where they serve, and they serve where it's profitable for them."

While FairPoint has seen industrywide declines in traditional landline voice subscriber lines, broadband services have continued to climb in New England. In Q1 2011, the ILEC added 13,600 lines, a 4.8 percent rise year-over-year. Over 56 percent of the increase in broadband subscribers came in the first quarter this year.